Submitted by PLUS Auction RIP (not verified) on April 18, 2008 - 12:23am.
Well the recent market turbulence will hopefully put this auction concept to rest. Anyone who has spent anytime in the business world would immediately see the flaws in this approach. First, I understand the savings assumptions used to sell the case were wildly high and so unless the goalposts are moved, they will whiff on meeting expectations. Second, the thought of having two lenders per state makes no sense whatsoever. Let the market drive consolidation and not government edict. Two lenders does not a competition make. Having analyzed the PLUS benefits that lenders are offering Parents for the 2008-09 award year, it is clear that no one is aggressively pursuing the business ahead of these auctions. My money says auctions postponed for one or two years and then disappears into the dustbin of history, where it belongs. Hasn't Congress done enough to disrupt the student loan market?
Not such a good idea
Well the recent market turbulence will hopefully put this auction concept to rest. Anyone who has spent anytime in the business world would immediately see the flaws in this approach. First, I understand the savings assumptions used to sell the case were wildly high and so unless the goalposts are moved, they will whiff on meeting expectations. Second, the thought of having two lenders per state makes no sense whatsoever. Let the market drive consolidation and not government edict. Two lenders does not a competition make. Having analyzed the PLUS benefits that lenders are offering Parents for the 2008-09 award year, it is clear that no one is aggressively pursuing the business ahead of these auctions. My money says auctions postponed for one or two years and then disappears into the dustbin of history, where it belongs. Hasn't Congress done enough to disrupt the student loan market?